What is Forex?

Forex, short for “foreign exchange market,” is the global financial market where individuals can trade currencies. If one accurately predicts that one currency will be stronger than another, it’s possible to make a profit.

In times past, before a global pandemic, people could travel internationally by plane. If you’ve ever traveled to another country, you’ve likely had to visit a currency exchange at the airport to convert your money into the local currency.

In the forex market, you can approach the counter or window where exchange rates for different currencies are displayed. These exchange rates indicate the relative value between two currencies from different countries. For example, if you’re traveling from the United States to Japan, at that counter, you can sell your dollars and buy Japanese yen.

The Forex market is the largest and most liquid financial market globally. It operates 24 hours a day, five days a week, and is a decentralized global market where currencies are traded worldwide. Most currency transactions in this market are done for speculative purposes, with investors buying currencies in the hope of selling them at a higher price in the future.

Despite having an extremely high daily transaction volume, the Forex market is actually divided into several parts, and the most relevant part for most traders is where transactions are done in real-time at the current market price.

The Forex market is a global market that facilitates currency trading, and its size and liquidity make it attractive to investors and speculators worldwide.